Deputy Prime Minister Angela Rayner is facing calls for an ethics investigation into her tax and housing arrangements after admitting she removed her name from the deeds of her family home before purchasing a seaside flat, a move which saved her £40,000 in stamp duty.
On Friday night, Ms Rayner confirmed she had taken her name off the ownership documents of her family house in Greater Manchester before buying a property in Hove, East Sussex, around 250 miles away. At the same time, she maintained that her former home in Tameside remained her primary residence.
By doing so, she has avoided paying thousands in council tax on a third property, a grace-and-favour flat in Admiralty House, central London, where she lives while carrying out her ministerial duties.
The Conservative Party has referred the matter to Sir Laurie Magnus, the Prime Minister’s independent adviser on ministers’ interests, arguing that Ms Rayner’s actions amount to “unethical” conduct. Sir Laurie will decide in the coming days whether to open a formal investigation.
Kevin Hollinrake MP, Chairman of the Conservative Party, set out the party’s case in a detailed letter to Sir Laurie, in which he accused the Deputy Prime Minister of “hypocritical tax avoidance”.
Mr Hollinrake wrote:
Dear Sir Laurie,
ANGELA RAYNER: BREACH OF THE MINISTERIAL CODE
I am writing to request that you open an investigation into the conduct of Angela Rayner, the Deputy Prime Minister, relating to her tax affairs and her Ministerial residence in Admiralty House.
As you will be aware, as part of the Ministerial Interests regime, Ministers are asked to confirm that their tax affairs are up to date and that the arrangement of their affairs is consistent with their overarching duty to comply with the law.
The Ministerial Code also provides that “where a minister is allocated an official residence, they must ensure that all personal tax liabilities, including any council tax, are properly discharged and that they personally pay such liabilities”.
Ms Rayner is supposedly occupying her grace and favour residence in Admiralty House as a second home, and as a result, (after month of obfuscation by Ministers) the Government has finally admitted that the Cabinet Office is paying her council tax bill. She purports that her house in Tameside is her primary home.
She does not reside in this property. The Conservative Party has written to the local council to ask that she is struck off the electoral register. That representation is enclosed in any annex to this letter, and will be of relevance to you in the context of the Minister making false representations to the Cabinet Office, and the tests that you should consider on residency. Of particular note is the HMRC guidance cited on how residency is determined.
Moreover, it has been reported that she has removed herself from the title deeds of her Tameside home in order to avoid the £40,000 second homes stamp duty surcharge on her new weekend residence in Hove. Firstly, this is hypocritical tax avoidance, by a Minister who supports higher taxes on family homes, high-value homes and second homes. But for the purposes of the Ministerial Code, it collapses the house of cards that Tameside is her primary home.
Whilst the stamp duty surcharge is based on properties owned rather than residency, she has effectively declared to HMRC that Hove is her primary home, whilst telling Cabinet Office that Tameside is her primary home. Such statements on her residency are contradictory. She is paying second homes council tax to Brighton and Hove council on a property that she tells HMRC is not a second home. This may be lawful, but it is inappropriate tax avoidance for a Minister subject to higher standards of conduct.
The Deputy Prime Minster has also briefed the media – presumably through her special advisers – that Tameside is her primary home for council tax purposes. This would appear to be a false statement designed to mislead if at the same time she had removed herself from ownership of that property to avoid paying stamp duty on her new home.
Given Tameside is clearly not her primary home, I would maintain that Admiralty House is likely to be her primary home – where she spends the majority of her time as a Minister. If so, it would be contrary to Cabinet Office protocol and the Ministerial Code for the Cabinet Office to continue to pay her council tax. As with the Prime Minister and Chancellor, she must pay the council tax bill personally. Cabinet Office has claimed that the council tax liability has been “properly discharged” – it cannot be proper if it based on false and contradictory statements.
It is in this light that I believe the Ministerial Code has been breached, and her tax affairs are not in good order. This directly engages her conduct as a Minister.
This is particularly acute given her Ministerial responsibilities for council tax, housing policy and electoral law. It is also at odds with the assertion by the Prime Minister in the foreword to the Ministerial Code of “the higher standards that the British people expect and that ministers must now follow” and the general principle that “Ministers should recognise that as office-holders, they are held to the highest possible standards of proper conduct, and ensure that they are living up to those standards in their words and actions”.
I believe an investigation is justified, and Cabinet Office should cease paying her council tax bill on Admiralty House. Her wider behaviour as a Minister is unethical and lacks integrity, and this necessitates a formal investigation of whether the Ministerial Code has been breached. If so, at the very least, an appropriate sanction could be to strip her of her Ministerial residence. You will also want to consider whether the Deputy Prime Minister must now recuse herself from all policy matters relating to taxation on second homes, given her skin in the game.
I am placing this letter in the public domain.
Yours sincerely,
Kevin Hollinrake
Chairman of the Conservative & Unionist Party
Mr Hollinrake added that Ms Rayner’s role as Housing Secretary made the issue “particularly acute”, given her responsibility for policies affecting housing and taxation.
Next Steps
Sir Laurie Magnus will decide whether the allegations merit a full inquiry under the Ministerial Code. If such an investigation were launched and a breach found, Ms Rayner could face sanctions ranging from reprimand to the loss of her ministerial residence.
Ms Rayner has not commented further since her admission on Friday night but has previously insisted that her Tameside house remained her main home.
The Cabinet Office has said her council tax liability at Admiralty House “has been properly discharged”.
